203.3.1 Decision Trees in r : Segmentation

Decision Trees

Introduction

Decision tree is a type of supervised learning algorithm that is mostly used in classification problems.In this technique, we split the population or sample into two or more homogeneous sets based on most significant differentiation in input variables.

Contents

What is segmentation

What is a Decision tree

Decision Trees Algorithm

Best Splitting attribute

Building decision Trees

Tree validation

Pruning

Prediction using the model

What is Segmentation?

Imagine a scenario where we want to run a SMS marketing campaign to attract more customers in the next quarter

Some customers like to see high discount

Some customers want to see a large collection of items

Some customers are fans of particular brands

Some customers are Male some are Female

Divide them based on their demographics, buying patterns and profile related attributes

One size doesn’t fit all

Divide the population in such a way that

Customers inside a group are homogeneous

Customers across groups are heterogeneous

Is there any statistical way of dividing them correctly based on the data